JSPL Stock Surges On Capacity Expansion

In the last one month the Jindal Steel and Power Limited (JSPL) stock has shot via the roof up over 80 per cent to attain Rs 12,000 plus levels. JSPL had secured the rights to the El Mutun iron ore mines which have huge reserves of 40 billion tones. There will be greenfield steel units in Bolivia as per JSPL''s agreement with the local government. In India, both the steel and power businesses are being scaled up substantially. To start with, Jindal Steel''s sponge iron and steel billet unit in Chattisgarh is going via an expansion programme to double its sponge iron capacity. The new plants will have captive power plants for which coal blocks will be awarded soon. But analysts say the JSPL rally is substantially fuelled by its power play.

By June 2008, a 1000 MW plant will be ready. Currently, the plant is of 350 MW capacities but will go up to 5000 MW in four years. Sitting on an estimated cash pile of over Rs 1,500 crore that the steel biz alone generates annually, JSPL is planning its mega rollouts in India and abroad.